From April 2026, if you are required to join Making Tax Digital (MTD) for Income Tax, you must keep digital records of your income and expenses using MTD-compatible software.

Digital record keeping is one of the core legal requirements of MTD.

It is not optional.

It replaces the traditional system of annual paper-based or spreadsheet-only bookkeeping.

Under Making Tax Digital, digital records mean:

• Income recorded digitally within compatible software 
• Expenses recorded digitally 
• Totals that can be submitted electronically for quarterly updates 
• A digital audit trail linking your records to your submissions
   

Digital record keeping applies to:

• Sole traders 
• Landlords 
• Individuals with both business and property income
   

If your 2024/25 qualifying income exceeds £50,000, you will need to comply with MTD digital record keeping rules from April 2026.

MTD digital records must include:

• Gross sales (before expenses) 
• Cash income 
• Invoiced income 
• Ecommerce income 
• Dates and totals
•  

• Business expenses 
• Rental property expenses 
• Clear categorisation of costs
   

It is important to understand that MTD is based on gross income, not just what appears in your bank account.

Recording net deposits instead of gross turnover is one of the most common errors under digital record keeping.

For sole traders, digital record keeping must reflect:

• Total gross business turnover 
• Sales received via cash, card or online platforms 
• A consistent bookkeeping method
   

Many sole traders currently rely on bank statements alone. Under Making Tax Digital, that approach may not provide a complete record of gross income.

Landlords must also keep digital records under MTD.

This includes:

• Gross rental income 
• Rental expenses 
• Digital tracking of property income throughout the year
   

If you are both a sole trader and a landlord, digital records must be maintained for both income sources.

Search results for “MTD digital records” often explain the rule but not the practical application.

Common areas of confusion include:

• How to record gross sales correctly 
• How ecommerce fees affect income totals 
• Whether bank feeds are required 
• How digital records feed into quarterly updates 
• How the Final Declaration uses those figures
   

Without a clear structure, digital bookkeeping can feel technical and unclear.

With the right process, it becomes systematic.

If you are searching for:

• How to keep digital records for MTD 
• MTD bookkeeping explained 
• How to record income under Making Tax Digital 
• MTD digital record keeping examples
   

You are looking for more than the legislation.

You need a working method.

That is exactly why I wrote:

Making Tax Digital 2026 for Sole Traders
and
Making Tax Digital 2026 for Landlords

These guides explain:

• Step-by-step digital record keeping 
• How to record gross income properly 
• How cash, invoicing and ecommerce sales are handled 
• How records feed into quarterly submissions 
• How the Final Declaration works
   

They are written in plain English and designed to make MTD digital record keeping clear and structured.

Under Making Tax Digital, your software is the tool — but your digital records are the foundation.

Understanding how to maintain accurate digital income and expense records ensures:

• Accurate quarterly updates 
• Clear annual reporting 
• Confidence in your figures
   

If you want structured guidance designed specifically for sole traders or landlords preparing for Making Tax Digital 2026, choose the guide that matches your situation.

Clarity creates compliance. Structure builds confidence.